SUMMARY: Even as smartphone adoption explodes worldwide, a new wave of consumer electronics and machine-to-machine devices will soon connect everything from cars to health services and even entire cities.

Prepare your mobile strategy for connected cars, homes, and lives

By Otto Sjöberg

Think you got it all figured out with your mobile Web site, apps for iPhone, iPad, Android, and maybe even for Kindle?

Then get ready to create services for the connected car, the connected house … well, better just get ready for the connected life.

Let’s try to get some perspective on the (r)evolution:

The first phase could be dubbed “connecting people,” using the mission statement of Nokia, the former industry leader who once led that charge and is now struggling to get back on track in partnership with Microsoft, another giant trying to regain presence in the mobile dimension.

Last year the global population reached 7 billion people and mobile connections exceeded 6 billion. That’s an 86% penetration and, in a few years, we will have more mobile connections than people: 9.1 billion in 2015, according to research by GSMA Wireless Intelligence and Machina Research.

So the first phase is nearly completed.

Next, we had the phase of “connecting people to the Internet” by mobile phone. That was Apple — and still is — leading the charge. This (r)evolution is currently in progress. With 1.3 billion mobile broadband connections in 2011, the vast majority is not connecting to the Internet by mobile.

In fact, most people still are not connected to the Internet at all: a mere 2.3 billion out of 7 billion people. Remember that when thinking of the changes ahead of us.

With the staggering number of smartphones sold worldwide, this phase will come to completion sooner rather than later; last year, 472 million smartphones were sold, a year-to-year growth of 58%.

Now we’re approaching the third — but not final — phase of the mobile (r)evolution: “connecting everything.”

“Today connected devices are dominated by mobile phones, but this will change in the future as a new wave of consumer electronics and machine-to-machine devices connect everything from cars to health services and even entire cities,” Chief Marketing Officer Michael O’Hara said about new research from GSMA, the worldwide association for mobile operators.

Without a doubt this is one of the most important macro trends in mobile, because with everything connected, everything will change. Again.

Ericsson, the Swedish, world-leading infrastructure provider, projects 50 billion connected devices in the “Networked Society” of 2020. Machina Research and GSMA estimate that the number of connected devices is expected to increase from more than 9 billion today to 24 billion in 2020. The figures differ, but the vision is the same.

“Perhaps even more powerful is how mobile is transforming adjacent industries, such as education, healthcare, payments and transactions, transportation, and utilities,” says Anne Bouverot, the newly appointed director general of GSMA.

This will expand the horizon of what we currently consider the mobile industry. Above is a graph of the projected top 10 connected applications in 2020 and the value they generate in the connected society. It’s a pretty surprising list.

The economic impact of these applications is calculated from two aspects:

Revenues.

Cost reduction and service improvements.

In 2020, revenues from the sale of connected devices and services and revenues from related services (pay-as-you-drive car insurance, as an example) will be worth a whopping US$2.5 trillion.

Cost reductions and service improvements will benefit healthcare, governments, and consumers — less directly but yet evidently — to a value of approximately US$2 trillion. (Smart meters will remove the need for manual meter readings, as an example).

A few more examples to illustrate:

New business models for car usage: We will see growth in flexible alternatives to traditional car ownership. The ability to locate and access vehicles will encourage people to share car schemes.

Smart meters: Machina Research expects the number of smart meters globally to increase from 130 million at the end of 2011 to 1.5 billion in 2020. There are demonstrable benefits in terms of cost savings for consumers. Trials have shown that people who install smart meters reduce their usage of electricity by 3% to 13%.

Traffic management: There are substantial benefits from guiding cars directly to available spaces thanks to connectivity. A study estimates that 5% to 10% of urban traffic — almost 60% in small streets — are vehicles looking for a parking space.

The connected life will pose new challenges for newsmedia companies:

How do you create relevant services in an “embedded” environment, where all things are connected?

How do you present your content when screens appear in all imaginable shapes and sizes?

How do you enable your customers to access your content and services cross-plattform?

That’s why some players argue that HTML5 apps will replace native apps, like Rob Grimshaw, managing director at FT.com, which replaced its iPhone and iPad apps last year with an HTML5 Web app. The company has had success and boosted revenue from the app since Apple no longer takes 30% from subscriptions.

“HTML5 will take down native apps. Why do you need a native app if it can all be done on the Web?” Grimshaw says.

Others, like Jose Valles from Telefonica, are more moderate, arguing the increase in different Internet-connected devices will make HTML5 Web apps more relevant, but not to the extent that Web apps will disappear.

“I don’t think native apps will be killed, but there is going to be a migration of the percentage of usage of the applications to HTML5,” Valles argues.

The important thing is to take this scenario into consideration when deploying The Next Mobile Strategy. Because if you do it right, there are opportunities, as well.